You just borrowed the install CD. The only time you needed it was for the install and (sometimes) installing drivers after installing new hardware.
You could actually copy one of the folders from the windows CD onto your HDD and use that instead of the install CD for device drivers. From memory, you could actually complete a full install from a folder copied onto the HDD.
I had to do this recently because of an old, well-known, but relatively rare bug with Windows installs. I created an 8GB partition at the start of the target hard disk, booted from it, and installed the OS into the rest of the disk. When the OS was up and running, I cleaned out the install partition.
Now I have an empty 8GB partition on my computer, which is a bit irritating. But I try not to think about it too much.
This is the main reason for the simplicity of key checks.
If you copied someone elses windows installation (cd burners were very expensive, but a floppy version existed), you'd also copy the serial number, and just use that. Even if the serial verification algorithm was complicated, noone would really have to crack it at all, because they'd just use the original serial for all the copies.
Piracy was (and still is) rampant with home users, but business users still needed some kind of a simple check (so.. a simple serial) to match the installation to an actual licence, which was more "protected" than the actual medium (cd, floppy), by using holograms, microprint, etc: https://media.karousell.com/media/photos/products/2018/09/13...